2026 Legislative Session Recap: Legislature Adjourns Sine Die

The Washington State Legislature adjourned sine die on March 12, ending the 60-day 2026 session. Lawmakers passed several housing reforms aimed at improving permitting, expanding housing flexibility, and supporting homeownership, while the session’s final days were dominated by budget negotiations and a controversial new “millionaires’ tax.”

MBAKS Advocacy During Session

MBAKS members played an active role throughout the session, helping ensure the voice of the homebuilding industry was heard in Olympia. During MBAKS Hill Day, members held 43 meetings with legislators, discussing housing supply challenges and priority housing legislation. Builders also participated in BIAW Hill Day, where members conducted 13 additional legislative meetings. MBAKS members Mark Villwock with DR Horton and Mike Appleby with Chicago Title also provided key testimony on housing legislation during committee hearings, sharing firsthand industry perspectives on how policy decisions impact housing production and affordability.

Key Housing Bills Passed

Condominium Reform (HB 2304)
Allows condominium projects up to four stories and twelve units to use an insurance-backed express warranty, helping reduce litigation risk and encourage smaller condominium development.

Permit Review Streamlining (HB 2418)
Clarifies permit application completeness standards and requires jurisdictions to designate a permit contact, improving predictability in the review process.

Commercial-to-Residential Flexibility (SB 6026)
Allows housing in many commercial and mixed-use zones in cities over 30,000. Cities may require ground-floor commercial uses on no more than 40% of commercial or mixed-use acreage, allowing redevelopment of underutilized commercial property for housing.

Rural Accessory Dwelling Units (HB 1345)
Authorizes counties to allow detached ADUs in rural areas under local regulations.

Middle Housing in Urban Growth Areas (HB 2269)
Extends middle housing types such as duplexes and townhomes to unincorporated urban growth areas.

Building Code Modernization (HB 2228 & SB 5156)
Updates building code provisions by allowing scissor stair designs in certain mid-rise buildings and modernizing elevator requirements.

Budget and Tax Policy

Lawmakers also approved a supplemental operating budget for the 2025–27 biennium totaling more than $80 billion. The budget addresses a projected shortfall through a mix of spending changes, new revenue, and transfers from the state’s rainy-day fund.

The session also saw passage of a new “millionaires’ tax” (SB 6346), imposing a 9.9% tax on income above $1 million starting in 2028. The policy is expected to face legal challenges under Washington’s constitutional restrictions on income taxes.

Looking Ahead

With the session complete, attention now shifts to implementation as state agencies and local governments begin putting these new housing policies into practice.

Read more about the legislative session and a full bill tracker on MBAKS Connect.

The Builders’ Bulletin is intended to provide a convenient way to track housing in our market and includes information from the Northwest Multiple Listing Service, State of the Cities Data Systems, Office of Financial Management and the Washington State Employment Security Department.

Download this month's report:

By MBAKS Senior Policy Analyst Allison Butcher

Housing Inventory Still Well Below Healthy Levels

Despite a modest increase in housing inventory for sale in King and Snohomish counties during September—reaching the highest levels seen all year with 1.13 and 1.26 months’ supply of inventory respectively—these figures are still well below the four-to-six month range that many industry analysts consider to be an indicator of a healthy market. The continued high demand and low supply is driving year-over-year price hikes of more than 14 percent in both counties.

The Builders’ Bulletin is intended to provide a convenient way to track housing in our market and includes information from the Northwest Multiple Listing Service, U.S. Census Bureau, Office of Financial Management and the Washington State Employment Security Department.

Download this month's report: